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FreightTech 25: UPS' ORION Software Doesn't Defy the Law of Physics. It Just Seems That Way

As might be expected from a company that spends about $1 billion a year on information technology, UPS Inc. (NYSE: UPS) owns some impressive stuff. But for Einstein-loving, defying-the-law-of-physics IT, probably nothing beats ORION.

Short for "On-Road Integrated Optimization and Navigation," the software program uses reams of shipping data to accomplish a straightforward mission: Calculating a driver's most efficient path for the typical shipping day, which consists of about 100 stops. The shock-and-awe comes with how ORION works. For each route per driver, ORION analyzes more than 200,000 routing options. From there, the numbers compound exponentially. UPS, a company not normally given to hyperbole, boasts that the quantity of daily route combinations available to a driver is greater than the number of nanoseconds that the earth has existed.

UPS began phasing in ORION in 2012 after a decade of development under the auspice of Senior Program Manager Jack Levis, who is considered the father of the software and who still runs the show. Today, ORION is operational across the entire US system; it is in very limited testing internationally.

The efficiencies, at least as they are described by UPS, are staggering. So far, ORION, on average, has reduced the number of miles driven on the typical route by 6 to 8 miles per day. In all, the software helps UPS cut 100 million miles off driving distances each year. These translate into major savings considering that cutting just one mile per day off a driver's road time saves the company the equivalent of $50 million a year in time and fuel.

UPS' culture is heavily influenced by what it calls "constructive dissatisfaction," which involves tinkering with something that already works in an effort to improve it. It employs that mindset with its technology in the same way it has long done with physical distribution. Earlier this month, it rolled out a navigation tool—known unsurprisingly as "UPSNav"— that feeds detailed turn-by-turn directions generated from ORION data into drivers' hand-held devices called a "DIAD" (which is in its fifth iteration since debuting in 1991). Through the navigation tool, drivers will be provided directions in granular detail, helping them, for example, locate key pick-up or delivery areas that may be across the street from a building's main entrance, UPS said..

Sometime next year, UPS will introduce its latest version of ORION, with a key feature being the ability to recalculate routes to adjust for factors like changes in traffic conditions. The upgraded version will also present updated route options that fit more efficiently with a driver's remaining pick-up and delivery requests for the day.

In the U.S. the company has rolled out the first phase of a "Network Planning Tool" which, should a problem arise that threatens to choke off package flows, allows engineers to re-route traffic from the problem area to sorting facilities elsewhere with the capacity to handle the volume. It also enables pre-emptive diversions to other modes like air and rail if adverse situations prevent timely ground deliveries. "NPT will lower sort and transportation costs, and it improves UPS' operations by providing our network with improved visibility and mechanisms to direct and redirect package volume between facilities," said Kyle Peterson, a company spokesman. "This ability helps us avoid costly bottlenecks."

UPS investment in, and obsession with, IT is hardly an option. On an average day, it delivers 17 million packages. In the peak period, it will average 30 million. As of the end of 2017, it received nearly 143 million online tracking requests per day. During peak, that number nearly doubled.

What's more, UPS must maintain its super-high delivery standards during a profound change in its business model. For decades, its bread-and-butter were business-to-business deliveries that were predictable and linear. Today, it handles more business-to-consumer traffic than B23B. The present UPS network is built to support the largely asymmetrical world of e-commerce and omnichannel distribution, where packages may be delivered anywhere and at almost any time. These days, seemingly every structure in America is a candidate for a delivery node. UPS' technology must be prepared for a reality that is here, and not going away.